The long-term goal of this proposal is to elucidate the molecular program controlling early liver development. The liver provides many essential functions and numerous liver pathologies are so life threatening that transplantation is the only option. Despite its physiological importance the molecular basis of liver development is poorly understood. A better understanding of liver development will provide insight into congenital liver disease and facilitate efforts to produce therapeutically useful hepatic tissue from stem cells. The liver is derived from the embryonic endoderm through a series of inductive interactions that are conserved in vertebrates. While we increasingly understand the genes regulating liver formation after the hepatic specification, how the endoderm is patterned to establish the foregut domain that responds to hepatic induction is poorly understood. We propose to address this using the experimental advantages of the Xenopus embryo, which are ideal for studying very early embryogenesis. We will test the hypothesis that secreted Wnt-antagonists in the anterior endoderm are required to establish the foregut domain and promote liver development, by inhibiting Wnt signals from the axial/lateral mesoderm. Aim 1: Characterize the Wnt-antagonists and Wnt ligands that regulate endoderm patterning in vivo. Aim 2: Determine the mechanism by which Wnt-mediated patterning establishes the foregut domain, by examining the transcriptional regulation of the Hex promoter. Aim 3: Characterize the molecular events downstream of Wnt-repression mediating liver development.